able in bankruptcy is concerned, but it does not release the bankrupt from liability in certain cases, e.g. under a judgment as co-respondent in a divorce, unless the court makes an order to that effect.

After a man is adjudicated bankrupt, the creditors may resolve to adopt a scheme of arrangement, and if such scheme of arrangement be approved by the court, the court may annul the bankruptcy.

§ 280. Private Arrangements with Creditors. —A debtor may arrange with his creditors privately that each shall accept part payment in satisfaction of the whole debt due. Such an arrangement only binds those creditors who are parties to it. It is not necessary that the agreement should be under seal, inasmuch as the forbearance of each to sue is a consideration sufficient to make the agreement a binding contract. Usually a deed is prepared by which, in consideration of the payment of a composition, the creditors release and discharge the debtor from the debts due. It is important that all the creditors should join. If one refuses, he may take bankruptcy proceedings, inasmuch as the making the composition is an act of bankruptcy (§ 260). If bankruptcy ensue, the deed takes no effect. It must be registered, otherwise it is void under the Deeds of Arrangement Act 1887.

§ 281. Authorities. The law of bankruptcy is regulated by the Bankruptcy Act of 1883, with its amending Acts of 1884, 1887, 1888, and 1890. The student may refer with advantage to the treatises by Mr. Baldwin, Mr. Williams, and Mr. Robson.

PART V

THE APPLICATION OF LAW

§ 282. Introductory.-It has hitherto been assumed that all commercial disputes in England are governed by English law. As a general rule, the laws of a state apply to all persons and to all transactions within the state. But cases often occur where mercantile transactions are entered into in one country, but are to be performed in another country. For instance, A. and B. enter into a contract in England that is to be performed in France. Suppose a breach of this contract to take place, ought the action for damages to be brought in England or in France, and is the liability under the contract to be governed by English or by French law?

Prima facie the law of the place where the action is brought will be applied by the courts, but as a matter of commercial convenience every civilised country recognises and enforces to some extent the laws of other states.

§ 283. What is Foreign Law ?—By foreign law is meant not merely the laws of foreign states, but the laws of different parts of the Empire. Ireland and Scotland have different laws from England. Each of the colonies has its own system of law. Irish, Scotch, and colonial law is, in England, regarded as foreign law.

§ 284. Land.-Land is always subject to the law of the place where it is situated. Such law governs―

1. The legal incidents that attach to its ownership; 2. The capacity of the owner to, transfer it, as well as the form of transfer ;

3. The capacity of the owner to leave it by will, the formalities of the will, as well as the effects of the will on the land;

4. Who is to take the land in case the owner dies without making a will.

Hence if an Englishman buys land in France, such land will in all important respects be governed by the law of France.

As is well known, a man by English law cannot marry the sister of his deceased wife; if he goes through the ceremony of marriage, any children resulting from the marriage are illegitimate. In some of the colonies such marriages are legal, and hence a child of the marriage is legitimate. But by English law such child cannot succeed to any land that his father may own in England, in case the father dies without making a will. To this extent colonial marriages with a deceased wife's sister are not recognised by the law of this country.

§ 285. Moveable Property.-The law of the "domicile " of a man at the time of his death determines

1. His capacity to make a will, the formalities of the will, and the legal effects of the will;

2. The person who is to take out letters of administration in case of intestacy, and how the property is to be divided;

3. The duties to be paid by those who receive the property.

A distinction is drawn between (a) probate duty and (6) legacy and succession duty. The former is regarded as a part of the expense of getting in the assets, and is payable in respect of the authority given by the state to enable the assets to be collected. In the case of a will, the authority consists of the probate of the will; in the case of intestacy, it consists of letters of administration, granted in England by the Court of Probate. The duty payable on the grant is payable in the country where the assets are collected.

Legacy duty is payable on all legacies, and succession duty on all successions to land. Such duties are regarded as a tax on the succession to property, and are payable according to the law of the domicile. For instance, if an Englishman domiciled in England dies, leaving personal property in France, probate duty will be payable in France, and legacy or succession duty in England.

§ 286. Domicile.—Reference has been made to the law of the domicile. Two elements are required in domicile: (1) actual residence in a country, and (2) an intention to remain in such country. If an Englishman goes to France, and hires a house for twelve months, intending to return to England, he does not acquire a French domicile; but if he takes the house intending to reside permanently in France, then he acquires for the time being a French domicile, even though he should subsequently change his mind and return to England.

Every man at his birth acquires the domicile of his father, and such domicile remains until he acquires a new

one.

§ 287. Contracts relating to Immoveables.—All contracts relating to immoveable property, e.g. land, as we have seen (§ 284), is governed by the law of the state where the land is situated. The word land includes all interests in land, for example, leaseholds. The purchaser of land in a foreign country must therefore be careful to see that he observes the rules relating to the transfer of land in such country, otherwise he will not obtain a good title. He must also remember that he cannot dispose of such land except in accordance with the law of the foreign state. If, for example, the land be in France and the owner die intestate, the land will not descend to the eldest son, according to English law, but will be divided amongst all the children, according to French law.

§ 288. Contracts relating to Moveables.-As a general rule, a contract relating to moveable property is valid everywhere if valid by the law of the place where the contract is made. A contract is regarded as being made in the place where the offer is accepted. The validity of the contract may

be considered in detail with reference to (a) capacity to contract; (b) formalities; (c) rights and liabilities; and (d) performance.

(a) Capacity to Contract.—It is doubtful in the case of mercantile contracts whether the capacity of the parties is to be referred to the law of the place where the contract is made or to the law of the domicile. The older authorities adopt the former rule, whilst the modern English authorities tend to adopt the latter law, referring all questions of capacity to the law of the domicile of the party.

(b) Formalities of the Contract. - Prima facie the formalities required are those of the country in which the contract is made; but there is nothing to prevent Englishmen abroad from entering into contracts according to the formalities required by English law, provided it appears that the parties contracted with reference to such law. In other words, the formalities of a contract depend on the law contemplated by the parties; but in the absence of any evidence to the contrary, the parties are presumed to contract with reference to the law of the place where the contract is entered into.

If the law contemplated requires a stamp as a part of the formalities, the contract must bear such stamp.

The formalities of a contract must be distinguished from the evidence required to prove a contract in a court of justice. The rules that govern evidence are those embodied in the law of the country where legal proceedings are taken. Hence if an action be brought in England on a foreign contract that by English law must be evidenced in writing, such written evidence must be given, though it is not required by the law of the place where the contract is made.

(c) Rights and Liabilities.-The rights and liabilities of the parties depend on the law contemplated by the parties, but there is a prima facie presumption in favour of the law of the place where the contract is made. A., a merchant in London, sold to B., another merchant in London, 20,000 tons of Algerian esparto, to be shipped by a French company at an Algerian port. Default was made in